Are Tariffs Still a Threat to Primoris' Renewables Momentum?

Primoris Services Corporation PRIM is capitalizing on market opportunities across various business sectors, including the Renewables business, power, grid, data centers and other related infrastructure projects. This demand growth is being fueled by federal incentives under the Inflation Reduction Act (IRA) and substantial private-sector investments in clean energy.

However, the broader policy environment remains fluid. The United States government’s ongoing scrutiny of solar panel imports from Southeast Asia and potential extensions of tariffs on imports from China could pressure costs and project timelines. Such supply-chain constraints could delay project execution and compress margins for EPCM contractors like Primoris, mainly across fixed-price contracts.

Nonetheless, despite ongoing and potential threats from the new tariff regime, PRIM’s Renewables business is going strong, thanks to robust demand in utility-scale solar and EPC work, alongside increased activity in battery storage projects. Moreover, PRIM is witnessing an uptick in power-related projects across industrial and residential market sections, coupled with increased demand for emerging technologies and data center development prospects.  As of June 30, 2025, Primoris’ total backlog was $11.49 billion, with the next 12-month backlog standing at $5.14 billion. This compares favorably with the total backlog of $10.45 billion and the next 12-month backlog worth $4.26 billion in the year-ago period.

Notably, following the 25-basis-point Fed rate cut, there has been a positive buzz in the economy, with additional optimism fueled by expectations of two more rate cuts in the remainder of 2025. Owing to such a favorable scenario and market demand tailwinds, Primoris is working on building its project pipeline across diversified business offerings and cashing in on them over the long term.

Primoris vs. Other Market Players

Firms like EMCOR Group EME and Quanta Services, Inc. PWR offer substantial competition to Primoris in the public infrastructure field, mainly across power, communications and industrial infrastructure.

EMCOR’s breadth in mechanical and electrical construction and Quanta Services’ dominance in electric power infrastructure create intense competition, with Primoris competing by focusing on niche strengths in utility, pipeline and specialty contracting.

Although the mentioned market players often secure the largest projects, PRIM is competitive on specialized contracts and selective bidding, giving it an edge in profitability and execution in its chosen areas. Its ability to balance risk and remain agile helps it carve out a defensible position despite the scale advantage of EMCOR and Quanta Services.

PRIM Stock’s Price Performance & Valuation Trend

Shares of this Texas-based specialty construction and infrastructure company have moved up 45.4% in the past three months, significantly outperforming the Zacks Building Products - Heavy Construction industry, the broader Zacks Construction sector and the S&P 500 index.

PRIM stock is currently trading at a premium compared with the industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 23.93, as evidenced by the chart below.

Earnings Estimate Revision of PRIM

PRIM’s earnings estimates for 2025 and 2026 have remained unchanged over the past 60 days at $5.08 and $5.55 per share, respectively. However, the estimated figures for 2025 and 2026 imply year-over-year growth of 31.3% and 9.3%, respectively.

Primoris stock currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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